Dutch food giant VION has announced it will begin a phased closure of the Hall’s of Broxburn site in West Lothian which will see around 1700 people lose their jobs.

The company said it had reached the decision following the completion of a 90-day consultation with staff on Wednesday, and if no buyer is found for the plant, Vion said it plans to close the facility by February 2013.

Finance Secretary John Swinney said the specialist task force set up in a bid to save the plant will continue in its efforts to find a buyer for the stricken plant, though will now also put in place measures to help staff being made redundant.

The task force, comprising the Scottish Government, West Lothian Council, Scottish Enterprise, Scottish Development International, Skills Development Scotland, trades unions, VION UK and local elected representatives, will hold its next meeting on October 10, the deadline VION has set for buyers to bid for the plant.

VION chairman Peter Barr said in a statement today: “We have done everything in our power to avoid having to take this extremely regrettable action but we have been unable to identify any viable alternative to the closure of the plant.

“This is a very sad day for all those involved but, unfortunately, the unsustainable losses which the plant continues to suffer, combined with the challenging economic conditions across all food sectors, have left us with no alternative.

“As we outlined when we made our initial announcement in July, VION has invested tens of millions of pounds in the Hall’s site over a number of years but it continues to record unsustainable losses.

“The outdated and inefficient layout of the site, overcapacity in the marketplace and increasing costs mean that it has been loss making for a number of years, a position we can no longer sustain.

“Throughout the consultation exercise we have had extensive discussions with our employees and their union representatives to seek alternative solutions but, while some efficiency improvements have been identified, they are not nearly enough to bridge the very considerable losses which Hall’s continues to incur.

“As part of this process, we explored the feasibility of undertaking a major overhaul of the site. However, the investment required to deliver a facility capable of competing with much larger and more competitive plants across Europe would have been enormous. In the current environment that level of expenditure is not an option.

“During discussions with the task force, the Scottish Government outlined proposals to buy and lease the site back to the company.

“While we greatly appreciated this imaginative and genuine offer of support, the level of funding involved was significantly below that required to resolve the site’s major and inherent problems.

“Consequently, we felt it would be entirely wrong to accept public money, knowing that it would not deliver a sustainable solution for the site.

“In tandem with the Scottish Government, we have been working to find potential new owners for the site and this process has uncovered a small number of interested parties.

"We are engaged in detailed discussions with these parties to establish if their proposals would provide a viable solution for the Broxburn site. We will be providing the outcome of these discussions at next week’s task force meeting."

Finance Secretary John Swinney said: “This is disappointing news for Scotland and particularly for those working at Hall’s of Broxburn and their families.

“Since VION announced the proposed closure in July, the Scottish Government and its agencies have taken every action in our power to secure the future of the plant, working with the company and stakeholders.

“We will continue to do so over the coming days. We are still working to secure a buyer, and the task force will meet again next week.

“All possible support will be made available to staff, teams have already been on site and resources are in place to help people who are looking at their options for the future.

“We will also work to address the serious potential impact on the local area, and the task force will draw up a recovery plan to address this and to find jobs for those affected by today’s announcement.”

Rural Affairs Secretary Richard Lochhead added: “With around 65 per cent of the pigs processed at Hall's coming from Scottish farms, this difficult news clearly marks an unsettling time for Scotland’s pig industry.

“However, I can assure pig farmers that Scottish pork remains an important part of our food and drink offering going forward.

“We are monitoring the supply chain situation closely and Quality Meat Scotland are advising the Scottish Government on options, including an alternative plant capable of up-scaling to process the majority of pigs currently consigned to Hall's.”